Super League clubs are likely to make a decision at their meeting in February on whether to sell part of their holding of Super League (Europe) Limited to an outside investor, thereby following in the footsteps of Premiership Rugby Union, which agreed to sell 27 per cent of the Premiership last December for more than £200 million to the private equity firm CVC Capital Partners.
That deal gives CVC the right to receive 27 per cent of all commercial revenues raised by Premiership Rugby, including income from broadcasting deals.
CVC’s objective appears to be to enhance the value of its investment before selling it on at a profit.
CVC were introduced to the rugby union clubs by the merchant bank Rothschild, which has now been appointed to introduce potential investors to the Super League clubs.
League Express understands that at their February meeting the clubs are likely to be presented with a number of proposals from private equity firms, with the key issues to consider being the amount of the investment their potential partners want to make, what percentage of Super League (Europe) they want to take and how the structure of the competition will be changed from 2022 to enhance its value to broadcasters, in order to maximise the potential broadcast income.
The process is likely to be a complex one, although League Express understands that Super League Chief Executive Robert Elstone is anxious to reach an agreement quickly in order to have a new investor on board to provide additional expertise in negotiating and maximising a new TV deal.
CVC, who previously owned a stake in Formula One before selling it at a handsome profit, may be among the potential bidders, although they had to outbid possibly as many as five other bidders before being accepted as a partner by the rugby union clubs.
They originally bid £150 million for a 51 per cent stake in the Premiership, but ended up paying £200 million for a 27 per cent stake.
League Express understands that Rothschild haven’t yet been paid anything by Super League for working on this project, but that their persistence with it in the hope of an eventual payoff is an indicator of their confidence that they can bring a suitable investor to the table.
League Express also understands that any investment in Super League, regardless of the amount, will not be simply given to the clubs to reduce their own indebtedness. Rather it will be invested to broaden the appeal of the game to a wider audience while also boosting participation.
© League Express Mon 30th Dec 2019